Today's Community Funding Opportunities Provide Enormous Benefits to Companies and Customers Alike. Here's Why.

The business of raising capital has changed dramatically over the last few decades, particularly the last ten years. In today’s expansive climate, round valuations can skyrocket and investments completely close without ever meeting in person. Such is the power of investing in our hyper connected, virtual marketplace. And more to the point: the days of a single angel investor writing one big check to elevate business to the next level is becoming a narrow thing of the past. We believe strongly in the wisdom of the crowd versus the wisdom of the elite to surface the next best solutions. Thank you, community funding! And more valuable: the precedent set six years ago with new laws allowing unaccredited investors access to innovative companies hustling novel solutions the world needs and indeed, wants.

Only in 2016 was the investment world truly opened to reach beyond a select group of millionaires, typically concentrated in a small region, like Silicon Valley. Prior to that, companies struggled to get funding as capital was concentrated and the under-privileged were under-indexed. What did it take most of all? Clout with the select few. As a result of this, founders lacking their own strong networks from which to draw early capital were often forced to accept unfavorable terms to secure funding. In short, the opportunity window on both sides of the investment fence (founders and supporting parties with resources) was lop-sided.

To underscore this remarkable shift even further, it’s interesting to note that in the early 2010s, industry leaders set out to convince Congress to allow anyone to invest in startups. In 2016, the law was changed to allow anyone to invest. That said, however, it was still flawed. It wasn’t until March of 2021, (a mere fourteen months ago!) when Congress updated the laws again, that raising money from your community became not only possible, but an attractive and wildly beneficial approach to fundraising.

In short, we pivoted from a closed “Clout-based” system to an expansive “Resourceful-Based” platform where smart, modern companies can directly access and leverage the people who richly believe in their innovations from the start.

Today, companies can raise up to $5 million of capital from their communities on one cap table line, and they can take reservations immediately.

“We are passionate about a world where everyone can invest in startups, not just rich people. And since the SEC Regulation Crowdfunding rule changes in March 2021, the industry has been growing very quickly. We're delighted that more and more venture-backed startups are choosing to raise capital from their community" said Jonny Price, VP of Fundraising at Wefunder, the company that has pioneered the regulation changes alongside Congress, and has now helped companies raise over $500 million from their biggest fans and supporters through Community Rounds.

Today, VC-backed companies like Mercury Bank and Replit have raised a Community Round from their communities in tandem with venture capital. And more importantly, with the cultural movement towards community ownership.

In this new environment there are some seriously bright spots on the horizon, and thankfully the stigma of crowdfunding is evolving to the value it is intended to espouse - engaging your community. When a company decides to do a Community Round, it allows individuals to invest in companies that interest and inspire them, for as little as $100. Companies that align engaging their community with their values, can build an army of supporters that envision a future the company is trying to see realized. Independent investors are more willing to believe these things can work, because they know, as consumers, what they want and need. This is why my company did a Community Round.

There are a lot of creative and well-founded people with ideas, and they need a clean and fast process to fund it if we’re ever going to solve our problems in a reasonable amount of time. With democratized investing pipelines in place, what other transformations are ripe for the picking? How about cost-effective recycling? Affordable middle-class housing? Systems for growing crops in droughts? Affordable medicine?

What continues to be most inspiring is that the new era of “interdependence” is flourishing with platforms like WeFunder and progressive companies like Sen-Jam Pharmaceutical. Sen-Jam is affectionately deemed the Pharma for the People, People because of its mission to develop and distribute safe, effective medications with radical affordability and accessibility. And in many ways we literally are the David to the Big Pharma Goliath enabling everyday people alongside bigger traditional investment partners to vote with their wallets for change in the ways medications are developed, distributed and priced, is an awesome move to marvel at.

It’s bar none, an incredible time to be innovating in the life sciences industry. With the kind of transparency that is enabled by the digital world we live in, and the importance health has in the lives of billions of people around the globe, we are thrilled to be offering everyday men and women the chance to own a future in revolutionizing healthcare. Perhaps even more outstanding is that community funding can stand directly beside larger strategic leaders in related fields to co-invest together and change the world for good. For us at Sen-Jam Pharmaceutical, that meant KVK Tech becoming one of our biggest strategic investors, who have brought their talent, time and treasure into the market opportunity because they see remarkable synergy in their values and the future they wish to co-create with us.

For all these things and more—the if onlys—the necessary components to start solving these problems are absolutely emerging now. There’s a widespread demand and need, an eager consumer base, a lot of smart people (and progressive companies!) with ideas, and millions of people with a few dollars they’d be willing to invest. Yet the intractable institutional resistance and cynicism may still be lingering and possibly in the way. But I don’t think so. I think the cultural tides are in the favor of a fresh new dawn in community capital raising.

Will we solve these problems? Absolutely. It’s working for countless new offerings, and those who made the initial effort to do that are reaping rewards. But how long will it take? As with so many other things, the only matter is time.?

Please share your thoughts in the comments below. And, please join us as we continue the conversation next Thursday, June 30th at 12noon EST at our Investor Roundtable with leading investors and thought partners who are fascinated by the emerging opportunities with Community Funding. HERE is the link to register. Hope to see you there!